The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, are each up more than 20% year-to-date and some market observer see more gains ahead for crude.

Recently, oil found support from diminishing global supply, which declined by 1.4 million barrels per day to 99.7 million barrels in January on plummeting exports out of the Organization of Petroleum Exporting Countries, according to the International Energy Agency.

“The main catalyst for the bullish run is a sharp pullback in OPEC’s output at the start of a six-month production-cutting deal, which was bolstered by top exporter Saudi Arabia’s pledge to pump well below its quota,” reports CNBC.

January 2019 represents one of oil’s best monthly performances on record. The month was Brent crude’s best month since April 2016. Energy information provider Argus Media, said producer cuts will eventually help level oil prices again as 2019 wears on.

In December, lengthy Organization of the Petroleum Exporting Countries (OPEC) discussions finally came to a conclusion, resulting in a larger-than-expected production cut. OPEC and associated partners agreed to cut 1.2 million barrels per day with OPEC being responsible for 800,000 barrels.

What’s Next for Oil?

Last week, “Saudi Energy Minister Khalid al-Falih said the kingdom plans to produce 9.8 million barrels a day in March, about half a million barrels below levels the Saudis agreed to and down from 11.1 million bpd in November,” according to CNBC.

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